It is illegal, and Petsmart (now that there's video all over the news of them mutilating fluffy little bunnies) has filed a complaint with the Dept. of Agriculture to investigate them.
However, small animal mills exist all over. They supply 95% of pet stores. The USDA is stretched thin, and very rarely censors these type of programs. This type of abuse is common.
That's why I don't shop at any pet store that sells animals in any capacity. My hard earned $$$ are not going to go to support people like this!
We are as gods to the beasts of the fields. We order the time o' their birth and the time o' their death. Between times, we ha' a duty. - Terry Pratchett.
"Men have forgotten this truth", said the fox, "But you must not forget it. You become responsible, forever, for what you have tamed. - Antoine de Saint-Exupéry